Few People Realize Elon Musk Saved Tesla And SpaceX Simultaneously

HOW ELON MUSK SAVED SPACEX AND TESLA AT THE SAME TIME [VIDEO]

Tesla and SpaceX are not just two companies led by Elon Musk — they are two visions — a sustainable future here on Earth while expanding the human race to other planets. Both companies aiming for these audacious, larger-than-life goals had to face far tougher times than they’re facing today.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Iqtidar Ali. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Elon Musk is undoubtedly one of the most ambitious CEOs in a generation. Musk could have easily just retired on an island after receiving $165 million following PayPal’s acquisition by eBay in 2002. Instead, he opted to invest all of the PayPal proceeds into Tesla and SpaceX. But it wasn’t easy. The two mission-oriented companies were saved from the brink of total failure due to the resilience and agility of Musk.

SPACEX

Space Exploration Technologies Corp. (SpaceX) needed rockets in order to create a financially viable business model by delivering commercial payloads to satellites in the orbit. As a first step, Elon Musk flew to Russia in order to get low cost intercontinental ballistic missiles but returned unsuccessfully. On the way back from Russia, Musk realized that by applying a vertical integration production methodology, SpaceX would be able to drastically reduce the raw materials costs.

In-house manufacturing of 85% of the launch hardware enabled SpaceX to produce their first rocket, the Falcon 1, at a significantly lower cost than they would have spent on buying a similar product. Musk also recruited some of the best engineers from other companies like Boeing and Lockheed Martin to create a world-class team.

Musk also went on a rigorous self-learning spree in the fields of Rocket Science and space technologies to build his personal knowledge and lead his young team at SpaceX.

Musk’s aggressive deadlines resulted in the creation and first launch of SpaceX’s ‘Falcon 1’ rocket — unfortunately, the first flight of the Falcon 1 (March 24th, 2006) only lasted 41 seconds before exploding. Nevertheless, this event didn’t lower the hopes of Musk and the SpaceX team.

Only a year later, the second flight of the Falcon 1 also failed and the third in August 2008 had met the same fate as the previous two for different technical reasons.

The fourth flight of the Falcon 1 was the last SpaceX could afford — if this one was not going to be a success, SpaceX would surely have gone bankrupt. Before the flight, it appeared like all the glitches had been fixed and Musk (and SpaceX) were blessed with a successful flight.

The next morning, Musk received a call from NASA and SpaceX was awarded a $1.5 billion commercial space flight contract — more than enough to save the company from bankruptcy.

To date, SpaceX has conducted more than 100 launches that account for over $12 billion in contract revenue.

TESLA

Tesla (formerly known as Tesla Motors) is the second oldest publicly listed American automaker after Ford. Creation and management of a large scale automotive company is an enormous challenge where competing companies often have more than 100 years of industry experience.

Elon Musk (an early investor), JB Straubel (now Tesla’s CTO), Martin Eberhard (Tesla’s first CEO), Marc Tarpenning and Ian Wright founded Tesla Motors back in 2003 with a dream of providing sustainable transportation to the masses but things definitely got off to a rocky start.

Three of the five Tesla founders (except Elon Musk and JB Straubel) had to leave the company due to management differences — Musk later took responsibility as CEO of Tesla Motors in 2006.

Although Tesla Motors had 100 pre-orders of the first long-range electric sports car, the ‘Tesla Roadster’ — the company was experiencing serious financial troubles as they weren’t able to start Roadster production before March 2008.

The first-ever dedicated electric vehicle manufacturer was quickly running out of cash and in dire need of outside funding to survive the 2008 global economic crisis.

Elon Musk decided, as a last resort, to approach Daimler in pursuit of getting a contract that could help save the company. In September 2008, Musk took a flight to Stuttgart, Germany and met with Daimler executives only to return with a promise that the execs would visit Tesla’s factory in Fremont in November.

Musk and the Tesla team had a small window of opportunity for survival and had six weeks to impress the Daimler executives. Musk’s idea was to turn Daimler’s Smart car into an EV before the Daimler team arrived — however, Smart cars were not made for the U.S. at the time. So JB Straubel had to source the vehicle from Mexico to make it happen.

With 5 and a 1/2 weeks of hard work around the clock, Elon Musk and the Tesla team were able to fit the Smart car with a battery pack and motors. Then, Daimler’s team received a demonstration of the first ever Smart Electric Drive EV that was pulled together in less than six weeks by Musk and his resilient team at Tesla. Sure enough, this turned out to impress Prof. Dr. Herbert Kohler and his team from Daimler.

This effort secured a last-minute contract with Daimler and gave Tesla some credibility along with a $50 million investment in the company that saved it from financial ruin.

In reference to Tesla’s near-death experience, Musk explained at Tesla’s 2016 Shareholder Meeting: “If we [hadn’t] done that, Tesla would have died because the Daimler partnership gave us credibility, that a major OEM was willing to work with us, and they also paid us for the (Smart ED2) development program which is really helpful from a revenue standpoint… Without that investment, Tesla would have been game over.”

“The two mission-oriented companies were saved from the brink of total failure due to the resilience and agility of Musk.”

And the $500M loan from Obama Admin. and decision by Obama era NASA to fund SpaceX.

Interesting what that does to the point Obama made that companies like Tesla and SpaceX only exist due to the industrial economy that spawned them. No $500M government loan and there is no doubt Tesla would not exist.

Rafael, the ATVM Program funding was drawn up by the Energy Dept. in the fall of 2008 as a direct result of the Energy Security Act of 2007 , which was passed with strong bipartisan support and with the early support of George W Bush. That is why for a while in 2010 and 2011 George W. was known as the “father of the modern electric car”.

Also:
“On November 5, 2008, the Department of Energy issued the Interim Final Rule and accomplished writing the rule for Section 136 of EISA 2007 ”
So the day after the election, with Bush still in office, the DOE finalized the spending authorized in the Bush 2007 Energy Security Act.

SpaceX saves the tax payers billions. They have single handedly brought down the cost of getting to space by a factor of 4. It used to cost the US taxpayer 450 million per launch. Now it’s 90 million. You really need to reevaluate your worldview. Your political persuasion is causing you to make up things, lie and not think straight. Stop being so focused on Republicans and Democrats, they are all scumbags anyway.

It predates Twitter. His first mass libel I can recall was of the NYT reporter who ran out of juice on a road trip. In reality, Tesla tech. support steered him wrong, but Elon trashed him six ways from Sunday anyway, with little basis in fact.

You’re late to the game. The first example I’m aware of, of Musk trash-talking someone repeatedly on social media, was the Martin Eberhard vs. Elon Musk war of words, followed by lawsuits in both directions. (Martin Eberhard was one of the true co-founders of Tesla Motors. Musk claims to be one, but isn’t.) That was circa 2008-9.

Not to say you’re wrong about the John Broder/NYT vs. Elon Musk war of words, but John Broder came off possibly even worse in that exchange, insofar as so much of what he claimed about the Model S and the trip he took simply was not true. Both Broder and Musk made accusations and claims far in excess of the actual facts; both of them wound up with lots of egg on their faces. But the egg on Elon’s face seems not to have stuck! 😉

More details about the John Broder vs. Tesla/Elon Musk feud here than even I wanted to know, for those deeply interested:

“True co-founders” is a matter of semantics. Musk was not involved in the formal founding process; but nothing actually happened at the company before Musk joined. Thus the courts ruled that Musk has a claim on that title, too.

I am a bit sceptical with regard to men wearing sunglasses, standing with folded arms in front of buildings, with a very determined stance – on a mission to save mankind.
Handing over money to the blues brothers is big cinema. The last song was the jailhouse rock.

Yes saw that, amazingly sad, always thought that guy was an attention w-ore a-hole. Triple confirmed today (if need be which was not really the case actually). Actually we are now at risk that people start making association of being an a-hole with electric cars. All can still be saved if he gets professional help with his Twitter problem.

The article begins with this statement: “Tesla and SpaceX are not just two companies led by Elon Musk — they are two visions — a sustainable future here on Earth while expanding the human race to other planets.”

The irony here is that the Space X rocket engines burn an awful lot of hydrocarbon-derived fuel in the rocket engine, which is an ICE. Whereas we all seem to agree here that burning dead dinosaurs is not really a sustainable form of transportation.

Besides, chemical rocket engines (like those that Space X uses) are not well suited for manned interplanetary spaceflight, so real-life “expanding human race to other planets” would require a radically different means of propulsion.

I too used to think this is somewhat of a contradiction… However, the next-generation rocket will use methane as fuel. While supply of sustainable bio-methane is somewhat limited, the amount needed for a couple dozen rocket launches a year is not really significant compared to other uses…

So, if using bio-methane in a rocket doesn’t constitute a deviation from the path to the “sustainable future”, why won’t we just use more and more of bio-methane (and/or bio-diesel, and/or for that matter plant-derived ethyl-alcohol) in ICE automobiles and forget about the batteries altogether? … just a devil’s advocate’s question for ya 🙂

I said it right there: it’s all about the amounts. It’s impossible (at least of today) to produce enough sustainable bio-methane to power a meaningful fraction of road transport. It’s perfectly sufficient though to power occasional rocket launches…

I should maybe add that one sustainable way to produce methane is from electricity. That’s way too expensive to be remotely competitive in road transport; but considering the relatively small fraction it would make up of the costs of a rocket launch, it would be perfectly viable. (Indeed they will have to do that to produce fuel on Mars for the way back…) So even without bio-methane, it would still be workable. (Just slightly more expensive.)

Yeah, the day he introduced “hourly 45-minute” NYC to Sydney flights on BFR’s I’m thinking, “Wait, huh? I thought this guy was about greening the planet and he’s planning hourly lift-offs on Qantas flight routes? What?”

From the article, it seems more like both Tesla and SpaceX were at one point saved by an important success in the nick of time. While Mr. Musk runs both companies and was no doubt involved in both these successes, that hardly means he saved them. It would be more accurate for the title of the article to say Daimler saved Tesla and NASA saved SpaceX.

If we follow that chain of thought then all last minute successes are a fluke, no matter who was behind them. I am quite sure Elon and straubel were the driving force behind the Tesla team managing to finish a test mule in 5 weeks-work that otherwise takes OEM 1-2+years. His biggest 2 merits are he knew how to gather a magnificent team in both companies and keep them highly motivated found the working strategy and stuck with it.
Small clarification – big fan of Tesla and Elon but he didn’t found the company, he came as a investor and only after a few years he booted Eberhard from the company.

Musk bet his entire fortune on bailing out Tesla Motors. Very, very few billionaires can say the same about their own companies. (Of course, one could also point out that if Elon had paid more attention to cost overruns at Tesla, that wouldn’t have been necessary.)

Let’s at least give Elon credit for putting his money where his mouth was, regarding Tesla Motors, in a way that very few self-made millionaires and/or billionaires have.

SpaceX… not so much, I think. I haven’t seen any claims that Musk risked personal bankruptcy to keep SpaceX afloat.

If you look at Musk’s bizarre behaviour over the last few days accusing a guy involved in the Thai cave rescues of being a paedophile and various defensive ill advised tweets, I wonder if the pressure of what he has been trying to do is overwhelming him.

When people who don’t obsess over EVs and Tesla ask me about whether he’s “a little nuts” (or something similar), my standard answer was: “He’s batsh** crazy, but in the way we need right now.” This vile nonsense of calling one of the Thai rescuers a pedophile risks pushing him into a different category. He’s morphing from being a brilliant and very colorful and slightly controversial figure into an unhinged guy with not nearly enough sense to self-edit. Being that high profile means you can flip from being an asset to a liability very quickly, and Musk is flirting with that state change right now. If I had his ear, I’d tell him behind closed doors to either stay off all social media completely for a couple of weeks, or at most limit his comments to very bland, PR dept.-approved messages about production or new car features. No attacks on anyone, nothing he could conceivably be criticized for posting. I’ve been saying for some time that I think the best path forward for Tesla is likely a sale to Google or Apple, with Musk being a board member and special consultant; Tesla has outgrown Musk’s management style and temperament, and… Read more »

Tesla Inc’s stock, TSLA, is a highly volatile stock. Trying to blame a short-term dip in price on a Tweet by Elon which is entirely unrelated to anything Tesla Inc. is doing, is pretty absurd, no matter how embarrassing and ill-advised that Tweet may have been.

It was another flawed attempt, at tongue-in-cheek “absurdity”, that I was spelunking for, just like the aqualung cave canister, that went completely unused, after being flown all the way to Thailand, for a successful rescue, that was already well underway.

The brink-of-bankruptcy events at Tesla Motors and at SpaceX were, so far as I can see, totally unrelated to each other. From the article it seems the two events happened within a few months of each other, but certainly not simultaneously.

There’s nothing in this article that an avid Tesla/SpaceX fan like me didn’t already know. Just more pom-pom waving from Evannex, the Tesla cheerleader.